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International Organizations as Policy Actors: An Ideational Approach

Daniel Bland and Mitchell A. Orenstein

Keywords

International organizations; public policy; ideas; pension privatization; think tanks

Acknowledgements

A previous version of this paper was presented in August 2009 at the Annual Meeting ofthe Research Committee 19 of the International Sociological Association (Montreal). The

authors would like to thank Caroline de la Porte, Angela Kempf, Rianne Mahon, StephenMcBride, Sonya Michel, and the Global Social Policy reviewers for their comments.

Daniel Bland acknowledges support from the Canada Research Chairs Program.

About the Authors

Daniel Bland is Canada Research Chair in Public Policy and Professor at the Johnson-Shoyama Graduate School of Public Policy (University of Saskatchewan campus). Apolitical sociologist studying public policy from an historical and comparative

perspective, he has published eight books and more than 60 peer-reviewed journalarticles. He recently published his volume Ideas and Politics in Social Science Research

(co-edited with Robert H. Cox). Professor Bland has held visiting fellowships at theUniversity of Chicago, Harvard University, the University of Helsinki, the University of

Southern Denmark, the Woodrow Wilson International Center for Scholars, and theGeorge Washington University.

Mitchell A. Orensteinis Professor and Chair of the Department of Political Science at

Northeastern University in Boston, MA. Focusing on the politics of economic reform inmiddle-income developing countries, he has published many articles and book chapters.

He is the author of Out of the Red(University of Michigan Press, 2001), which comparesstrategies for economic transformation in Central and Eastern Europe, and Privatizing

Pensions (Princeton University Press, 2008), which explores the role of internationalorganizations in the spread of pension privatization worldwide. His new project analyses

the rise and fall of economic paradigms including communism, Keynesianism, andneoliberalism.

Contact Information

Daniel Bland

Johnson-Shoyama Graduate School of Public Policy101 Diefenbaker Place

Saskatoon, Saskatchewan, S7N 5B8

E-mail: daniel.beland@usask.caPhone: 306 966-1272

Fax: 306 966-1967

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Introduction

One of the core beliefs in the global social policy literature is that some international

organizations and coalitions are more liberalor more socialistthan others, reflecting

the political biases of leading states. In their 1997 volume, Bob Deacon and his

colleagues argued that, on social policy, the World Bank and the IMF followed the liberal

line of the United States while the European Union and the ILO took a more European

or socialist approach (Deacon et al., 1997). Robert OBrien (2002: 144) similarly

classifies international organizations into those with little concern for social policy

versus those that advocate a more vigorous social policy. Robert Wade (1996), in an

outstanding blow-by-blow account of debates over the landmark World Bank publication,

The East Asian Miracle, argues that liberal forces within the Bank successfully fought

off Japanese attempts to raise questions about liberal development strategies and to

highlight the successes of state directed investment in a clear cases of paradigm

maintenance. International organizations, in this view, have more or less fixed

preferences on social policy and other matters that reflect the politics of their masters (see

also Wade, 2001; Wade, 2002).

Taking seriously OBriens (2002: 145) notion that international organizations

are both a tool for implementing policy of powerful actors and an arena for contesting the

content of that policy, we argue that this characterization of international actors as

politically aligned along predictable axes is problematic. Ideas matter much more and

international organizations are far more flexible than most structuralist accounts would

predict. In fact, the policies of international organizations are highly and continually

contested (Deacon and Stubbs 2011), to the extent that policy consensus within

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international organizations may be the exception, not the rule. International

organizations1 are open systems in the sense defined by Bertalanffy (1968) and other

system theorists, who argue that a living or open system exchanges matter with its

environment, presenting import and export, building-up and breaking-down of its

material components. International organizations frequently have shown themselves to

be open to new ideas and approaches espoused by well-positioned policy entrepreneurs.

They commonly reverse course on policy. This makes it difficult to characterize the

policy approach of international organizations as stable, except during relatively short

periods of time, where they may exhibit ideological consistency. Intense contestation

differentiates international organizations from those think tanks (Rich, 2004; Stone and

Denham, 2004) that are tied to a particular interest group or ideology. International

organizations tend to navigate a route between complex and shifting ideas and interests,

rather than adhere to a consistent, single path.

To illustrate this theoretical claim, the following analysis shows how international

organizations approached pension privatization from 1994 to 2011, with an emphasis on

the World Bank and, to a lesser extent, the European Union, to show that international

organizations changed their positions over time in response to changing circumstances

and perceptions within transnational pension policy networks. This made them far more

flexible than many domestic think tanks actively involved in the same policy area.

Working within international organizations, policy entrepreneurs (Kingdon, 1995;

Mintrom, 1997) directly impacted transnational pension policy advice, building and

ultimately rejecting the transnational campaign for pension privatization. Moreover, the

directions that these policy entrepreneurs took were not entirely predictable from their

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political background or the governments they served. While it would be foolish to argue

that structures of political power have no bearing on the actions and advice of

international organizations, our point is that it is difficult to pin international organization

behavior too closely to the power of strong states or stable ideologies. International

organizations as sites of contestation are simply too fluid for this to be true, except over

relatively short periods of time (see also Kogut and MacPherson 2011). They are open

systems that create incentives for continuous contestation and are vulnerable to political

and ideological shifts in the broader ideational arena. To stress this reality, we compare

these organizations with several ideologically-driven think tanks, which have proven

much more rigid in their advocacy of pension privatization than the World Bank and

other international organizations.

Examining changing ideational and discursive processes within international

organizations matters because studies have shown that these processes can have a direct

influence on domestic policy (e.g., Bland and Cox, 2011; Mahon, 2009; Mahon and

McBride, 2008; Schmidt, 2011; Skogstad, 2011; True and Mintrom, 2001). This makes

the analysis of how ideas and discourse evolve within international organizations one of

the most important frontiers of global social policy theory. We contribute to this

discussion by showing that international organizations are far more open systems than

many believe and that their constantly evolving internal ideas and discourse can strongly

impact policy.

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Ideas and International Organizations

Since the 1990s, a growing number of scholars, including students of international

organizations, have paid attention to the direct role of ideational and discursive processes

in politics and policy.2A number of authors have demonstrated that ideational processes

help construct the social and economic problems most public policies are designed to

address (Mehta, 2011; Kingdon, 1995; Stone, 1997). Accordingly, ideas shape the

understandings that underpin political action and the rationale and purposes of

organizations and policies. As far as the role of transnational actors is concerned,

especially crucial are the ideas that can supply country-level policy actors with goals,

norms, and blueprints grounded in a set of assumptions about how to address the issues of

the day through the use of specific policy instruments (Blyth, 2002; Hall, 1993; Skogstad

2011). These ideas provide guidance on institutional creation and reform and generally

serve to reduce uncertainty in times of perceived crisis (Blyth, 2002). By doing so, ideas

help actors define their interests, which are shaped not only by material conditions but

through interpretations of these conditions (e.g., Blyth, 2002; Hay, 2011; Jenson, 1989;

Steensland, 2006; Schn and Rein, 1994; Stone, 1997; Weir, 1992).

From the perspective of international organizations, ideas are a crucial vehicle

through which they can influence domestic policy development. This is true because

these organizations lack formal veto power over domestic policy. This lack of formal

veto power forces them to work through persuasion, convincing important domestic veto

players3 to adopt new policy preferences. Considering this and the limits of financial

conditionality, ideational processes are the most central means through which they

attempt to shape domestic policy (Orenstein 2008). Consequently, under most

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circumstances, international organizations are analogous to domestic think tanks, in the

sense that ideas and expertise constitute their main source of policy influence. Yet, as our

analysis of the pension privatization debate suggests, this analogy between international

organizations and think tanks should not hide one key distinction: that international

organizations are much more open to ideational change than ideologically-driven think

tanks. Ideologically-driven think tanks typically promote the same policy paradigm for

extended periods of time, regardless of changes in expert discourse, new information, or

perceived successes and failures of the paradigm. International organizations do not,

since they tend to be riven by disputes between different experts and policy paradigms.

Policy paradigms often are seen as a major source of policy stability. This is the

case because policy paradigms are coherent sets of assumptions that help policy actors

reduce uncertainty and deal with emerging social and economic problems using

integrated policy solutions (Hall, 1993; for a critique of the concept of policy paradigm

see Carstensen, 2011)4. In the analysis of international organizations, it is common to use

the concept of policy paradigm, which offers much analytical leverage to analyze the

discourse and the domestic policy impact of such organizations (Skogstad, 2011). Yet,

one contribution of this article is to show that, in the field of social policy reform at least,

international organizations like the World Bank do not stick to the same policy paradigm

over long periods of time, as these organizations are open to the influence of diverse

policy entrepreneurs who mobilize and bring about profound ideational change.

International organizations are not consistent over time in their policy preferences

because they are not subservient to a single interest group or state, but rather open

systems, vulnerable to a wide variety of influences and experts committed to competing

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social policy ideas and paradigms. This view of international organizations as open

systems contrasts with the realist one, which looks at international organizations through

the lens of a principle-agent dilemma. In the realist perspective, international

organizations are agents of national states. The principle decision-makers are

powerful states. Rarely do international organizations do anything important that they are

not delegated to do by their masters (see Hawkins et al. 2006).

While liberal internationalists contested the realist view by arguing that

international organizations can act on their own to promote cooperation among states, in

recent years, constructivist scholars have taken a different tack, focusing on the ideational

or agenda-setting function of international organizations. For instance, Michael Barnett

and Martha Finnemore (2004: 25) have argued that international organizations have four

basic sources of legitimacy: the rational-legal authority that comes from their charters,

the delegated legitimacy that they derive from states, the moral legitimacy that comes

from their important missions, and the expert legitimacy based on their widely-accepted

expertise in core areas. While realists emphasize rational-legal and delegated authority,

constructivists emphasize moral and expert legitimacy as well, showing that these give

international organizations a certain autonomy from the agendas of powerful states.

This article adopts a constructivist approach, according to which international

organizations are open systems (Bertalanffy 1968) motivated by agendas of a variety of

powerful states as well as the training, beliefs, and ideas of their staffs (Chwieroth 2010).

As a result of these competing sources of legitimacy and power, advocates of a wide

variety of perspectives may have an impact on the construction of the perceived interests

and the actual policy behavior of international organizations to an extent that may vary

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over time. Empirical analysis of internal discourse of the World Bank on pension

privatization shows that IOs are in fact more open to the shifting ideas of expert

communities than ideologically-driven think tanks.

The example of pension reform is interesting to analyze because this field is

typically described as an arena in which the World Bank has developed a coherent and

stable policy paradigm associated with the idea of privatization (Merrien, 2001).

Recognizing the importance of the time frame used to study both ideas and policy

changes (Campbell, 2004), the following analysis shows that, even within the World

Bank, policy ideas are continuously in flux, an important yet seldom recognized feature

of the policy life of international organizations.

Pension Privatization: The World Bank-led Campaign

Pension privatization began in 1981, when US-trained economists working for the

government of dictator Augusto Pinochet cancelled the pay-as-you-go (PAYG) pension

system in Chile and replaced it with one based on individual pension savings accounts

administered by competing pension fund companies (Brooks, 2005; Madrid, 2003;

Mller, 1999; Mller, 2003; Valdes, 1995; Weyland, 2005). Pension privatization, as the

term is used here, refers to the partial or full replacement of state-administered PAYG

pension systems with ones based on individual pension savings accounts. The Chilean

experiment garnered interest from the UK government of Margaret Thatcher, which

initiated a partial replacement of income-related state pensions with voluntary individual

accounts in 1986 (Pierson, 1994). Other Latin American countries began to show an

interest in pension privatization in the early 1990s once Chiles economy started to grow

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rapidly. It was widely believed that pension privatization had created a pool of domestic

capital that helped to stabilize and grow the Chilean economy (World Bank, 1994).

At the same time, the World Bank got on board with the pension privatization

campaign. Chief Economist Lawrence Summers launched an effort to promote pension

privatization to help countries cope with demographic aging (Orenstein, 2008). Summers

believed that pension privatization would enable countries to continue to provide old-age

pensions without bankrupting PAYG pension schemes, which require a rough balance

between contributions and benefits and could run into problems as the proportion of older

beneficiaries increases. In 1993, Summers became undersecretary of the US Treasury for

international affairs under President Bill Clinton. Starting in 1994, with the publication of

its landmark report, Averting the Old Age Crisis,5 the World Bank led a transnational

campaign for pension privatization through a core group of pension reform officials from

its Social Protection division. This campaign was joined by additional international

organizations and government agencies, including the IMF (International Monetary

Fund), the OECD (Organization for Economic Co-operation and Development), the ADB

(Asian Development Bank), and USAID (United States Agency for International

Development). Most of these were Washington-based organizations, with the exception

of the Paris-based OECD, which played a key role in popularizing pension privatization

in Europe. The campaign, as a result, had a major impact on policy in Central and Eastern

Europe, but also succeeded in spreading pension privatization ideas in Asia and Africa6

(Orenstein, 2005; Orenstein, 2008).

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very same international organization that had driven pension privatization in prior years.

This raises some important questions about how the World Bank (and international

organizations in general) formulates its advice and how discourse within the World Bank

unfolds.

We observe this ideational battle in the pension arena, where international

organizations have regularly become a battleground for experts of diverse perspectives

who seek to mobilize the resources of these organizations to their own ends. Starting in

the 1990s, the World Bank was captured by a core group of pension privatization experts,

some from Chile and Argentina, two of the early adopters in Latin America, and their

sympathizers from OECD countries, who used the World Bank effectively to pursue their

own policy agenda. This group clearly enjoyed a period of strong ideational dominance

within the World Bank and broader global pension policy circles. However, the vigorous

campaign they launched for pension privatization worldwide drew detractors from within

the World Bank that ultimately challenged the dominance of the pension privatization

core group.

The first major challenge was launched in a 1999 conference organized by then-

World Bank Chief Economist Joseph Stiglitz, in which he presented a paper with future

White House budget director Peter Orszag (Orszag and Stiglitz 2001) critiquing the

World Bank approach to old-age pensions. Their deliberately provocative paper took

aim at World Bank pension advice over the years since 1994 and questioned the basis

upon which the World Bank supported privately-managed pension savings accounts.

Orszag and Stiglitz argued that pension privatization did not increase national savings

rates as advocates claimed, did not improve labor market incentives, did not increase

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rates of return, could not control fees through competition, and was based on an

erroneous critique of PAYG pension systems. In conclusion, as they claimed, most of the

arguments used to support pension privatization were not substantiated in either theory

or practice (Orszag and Stiglitz 2001). This helps explain why Lawrence Summers, then

undersecretary of the US Treasury for international affairs, called for Stiglitz not to be

renewed when his term expired in 2000 (Wade 2001).

This critique sparked other, more sustained efforts, culminating in two major

reports published in 2005 and 2006. Keeping the Promise of Social Security in Latin

America was a 2005 World Bank report that heavily criticized the impact of pension

privatization in that region of the world. It argued that mandatory, private pension

savings accounts had little benefit other than ratcheting down . . . . expectations (Gill et

al., 2005: 280) of unsustainably high promises made in PAYG pension systems in Latin

America. However, systems based on private pension savings accounts that replaced

them did not give appropriate focus to poverty reduction, did not address coverage issues,

and suffered from high fees. For instance, in Chile, such fees ate up half of all pension

benefits for workers, who started contributing in the 1980s and retired starting in 2000

(Gill et al., 2005: 272). The report concluded that there was no basis for individual

accounts playing such a large role in pension provision in Latin America.

As this report was being written, Chile, the country that pioneered pension

privatization, re-reformed its pension system under President Michelle Bachelet to

improve poverty reduction. Bachelets pension reform commission issued a bold

condemnation of the privatized system along lines that were similar to those emphasized

in the 2005 World Bank report: half of contributions were lost to fees, the promise that

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the system would increase coverage had not materialized, and the system was manifestly

unfair, harming the poor, women, or those without high salaries or long work histories

(Matijascic and Kay 2006).

The 2006 Independent Evaluation Group (IEG) report headed by Emily Andrews

similarly criticized the World Banks pension work for focusing too much attention on

switching to individual accounts and ignoring poverty reduction goals (World Bank

2006). Andrews had worked for the Bank in Kazakhstan and came to the conclusion that

the Bank had advocated reform in countries that lacked important preconditions for

successful private pensions, such as inadequate financial markets or regulatory capacity.

The IEG report recommended rebalancing the World Banks pension work to support

reform of PAYG pension systems and making sure that it only advocated pension

privatization in countries that had developed financial systems and institutional capacity.

The report argued, echoing Orszag and Stiglitz (2001), that there was little evidence that

pension privatization had increased national savings or aided capital market development.

The World Bank had been over-enthusiastic in its support for pension privatization and

needed to refocus on other goals. Interestingly, the World Bank regularly commissions

independent evaluations of its advisory work. These IEG reports are directed by Bank

officials nearing mandatory retirement age who do so as their last assignment for the

Bank, to enable them to provide dispassionate analysis an institutionalized process in

which the Bank invites critical examination of its own work.

It is striking, given Wades (1996; 2001; 2002) conclusions about paradigm

maintenance at the World Bank that these reports were published at all. They appear to

have been subject to the same process of redaction that Wade reports for the documents

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he analyzes. Yet, the burning conclusions ultimately came through. And in this instance,

World Bank ideas and behavior seem to have changed. Pension privatization fell out of

favor at the World Bank. The Director of Social Protection who helped to organize the

World Bank campaign for pension privatization retired and was replaced not by a pension

advocate, but by a labor market expert with limited interest in pension privatization. Core

pension privatization experts at the World Bank went to work in a variety of other

departments and their pension work no longer focused so heavily on privatization. At the

same time, government interest in pension privatization worldwide slowed. Both supply

and demand dried up as the pension privatization lull of 2005-2010 set in.

The European Union experienced similar debates on pension privatization and

similar changes of opinion over time. While starting in 1990s, ECOFIN (European

Council for Finance) issued statements strongly in favor of pension privatization and

fiscal sustainability and modernization, social policy ministers came out against

privatization and in favor of pension adequacy. With the foundation of a joint

committee to study the pensions issue in 2001 (Council of the European Union 2001),

such contrasting views began to be reconciled. This process culminated in a 2012 White

Paper: An Agenda for Adequate, Safe and Sustainable Pensions, in which pension

privatization was no longer seen as the chief means with which to address Europes

demographic aging problem (European Commission 2012). Instead, increases in

retirement age, unification of male and female retirement ages, and restricting access to

early retirement were stressed. Encouraging greater supplementary pension saving was

also mentioned as an important target; however, it was portrayed as supplementary to,

rather than as a replacement of, public PAYG systems. This represented a change in

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emphasis even over the preceding Green Paper (European Commission 2010), which

accorded private pensions a more central role in resolving Europes demographic

challenges.

It would be wrong, therefore, to view international organizations as single-minded

and stable on pension policy. The best way to emphasize this reality is to compare these

organizations with domestic think thanks that exhibit strong ideological and policy

consistency over time. Although some think thanks like the US Brookings Institution are

genuine university without students (Weaver, 1989) emphasizing detached, academic

research over advocacy, other think thanks work more like interest groups and political

advocates defending the same policy alternatives over long periods of time. In the field of

pension privatization as elsewhere, the comparison between this type of advocacy tanks

(Weaver, 1989) as they operate in the United States and international organizations is

especially telling.

As background to the discussion about US think tanks, it is important to stress the

nature of the debate on pension privatization in that country and, especially, the dramatic

nature of the political rejection of this policy alternative in 2005, when President George

W. Bush failed to convince Congress and the public to privatize the federal old-age

insurance scheme, which was created during the New Deal and is known as Social

Security. Although the push to privatize Social Security began in the 1970s and 1980s, it

is only during the mid-to late 1990s that the privatization campaign strongly impacted US

policy debates. In the end, although President Clinton failed to support this policy

alternative, privatization became for the first time a mainstream legislative option during

his second term. Once in the White House, George W. Bush put together a commission

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that supported Social Security privatization but its report came out in the after math of the

events of September 11, 2001, after which pension reform was not a priority anymore

(Bland, 2005). It is only after his reelection in November 2004 that George W. Bush

launched a bold campaign to privatize Social Security. In early 2005, the president toured

the country to advocate reform but he failed to convince most members of Congress and

the public to support reform. In the end, his campaign was a genuine and spectacular

political failure (Altman, 2005; Bland and Waddan, 2012; Ross, 2007; Edwards III,

2007). This rejection of pension privatization by a country that had long supported this

type of reform through organizations like USAID did not help promote it around the

world.

Interestingly, however, in the United States since 2005, influential ideologically-

driven conservative think tanks have kept promoting pension privatization, both at home

and abroad. This is where the comparison between these think tanks and international

organizations is especially telling, as far as the ideational fluctuations of the latter are

concerned. Compare, for instance, the World Bank or the EU to the Cato Institute, a

libertarian US think tank. For decades, this organization has been a strong advocate of

pension privatization in the United States. In the mid-1980s, the Cato institute even

developed a long-term, Leninist strategy to weaken support for defined-benefit public

pensions in the United States (Butler and Germanis, 1983; Teles, 1998). More than a

decade later, during the final years of the Clinton presidency, the Cato Institute was at the

forefront of the push for pension privatization in the United States, as it published books

and papers that backed this policy alternative and articulated a systematic privatization

paradigm (e.g., Ferrera, 1998; Ferrera and Tanner, 1998). The same remark applies to the

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George W. Bush years, during which Cato experts continued to support efforts to

transform Social Security into a system of individual savings accounts explicitly inspired

by the Chilean model. During the 2005 campaign to privatize Social Security launched by

President George W. Bush, the Cato Institute provided strong support for the presidents

initiative (Niskanen, 2005). More interesting for our discussion, however, is the fact that

the crushing political defeat of this initiative and even the 2008 financial crisis did not

push Cato to significantly alter its views on pension privatization. As opposed to the

World Bank, which revised its position over time, the Cato Institute has continued to this

day to actively promote the pension privatization paradigm, without interruption (Tanner,

2007; Cato Institute, 2009; Tanner, 2012).

In the United States, the Cato Institute is not the only ideologically-driven,

conservative think tank that has maintained its support for Social Security privatization

after the humiliating defeat of President Bushs 2005 privatization campaign. Take the

American Enterprise Institute (AEI), for example. Since late 2007, the main Social

Security expert at the AEI is Andrew G. Biggs, a strong privatization advocate who had

been appointed by President George W. Bush as Principal Deputy Commissioner and,

earlier on, Deputy Commissioner for Policy of the Social Security Administration, the

organization in charge of administrating the federal old-age insurance program. A

controversial figure, Biggs moved to the AEI as a staunch advocate of Social Security

privatization, an ideological orientation and a policy paradigm clearly displayed in his

recent publications (e.g., Biggs, 2011a; Biggs, 2011b). The many publications of this

LSE-trained economist illustrates the enduring commitment of the AEI to Social Security

privatization, which began long before the 2005 Bush initiative and was not deeply

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altered after its clear political defeat.

As opposed to ideological think thanks like the Cato Institute, which constitute

policy entrepreneurs devoted to the stable, long-term promotion of a clear policy agenda

(Rich, 2004; Weaver, 1989), international organizations are sites of contestation because

they are open systems. Governments of various and changing political stripes may seek

influence at any point in time, though in the pension reform area, this influence appears

to have been minimal. The openness of international organizations also derives from their

expert character and staffing. Experts are free to change their minds with shifting

perceptions of best practice. They are not trained ideologues, like some think tank

experts, who are little more than advocates, but shaped more by their professional

training. This may induce certain biases (Chwieroth 2010), but in the pension area, it

does not seem to have prevented the existence of sharply contrasting policy views

concerning pension privatization. Led by policy experts, vulnerable to influence of

governments, international organizations are radically open to ideas that may arise in any

number of ways from a variety of sources.

The Impact of Policy Entrepreneurs

One of the most important sources of international organization ideas is not governments,

but individual policy entrepreneurs. In the expert-dominated environment of international

organizations, policy entrepreneurs have the ability to have a strong impact. Indeed, the

launching of the pension privatization campaign at the World Bank can be traced to the

advocacy of one leading policy entrepreneur, Lawrence Summers, together with a policy

team led by Nancy Birdsall, and a report-writing team led by Estelle James. These

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entrepreneurial figures established a clear problem definition, a critique of pre-existing

PAYG pension systems, an analysis that proved the value of pension privatization, and

formed an advisory group to promote this privatization paradigm around the world.

Without the efforts of these individuals, pension privatization would never have become

Bank policy (Orenstein 2008).

Similarly, the following Chief Economist of the World Bank, Joseph Stiglitz, also

acted as a policy entrepreneur in this area to sell a very different perspective on policy.

Rather than supporting pension privatization, he opposed it. While his initial paper, book

publication, and conference did not put an end to pension privatization, he did encourage

further dissent within the World Bank that ultimately brought the pension privatization

campaign to a close. Likewise, the individuals who sought to make their careers within

the World Bank through a critique of pension privatization certainly had a strong impact,

as did the outgoing Bank official who led the internal evaluation report that slammed its

pension work.

Since the World Banks reputation depends on its expert legitimacy, the

viewpoints of individual experts can matter a great deal. Like in domestic policymaking

(Kingdon, 1995), powerful and well-placed policy entrepreneurs can have a substantial

impact on policy. Often, this impact takes place through careful analysis and scholarly

proof, not just bureaucratic infighting. Since the currency of the World Banks work is

largely knowledge, individuals who appear to improve upon that knowledge can gain

considerable power. Their expert legitimacy may also be closely tied to their training and

academic track record in the top Western universities.

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What is also interesting is that it would be difficult to trace the views of these

policy entrepreneurs to the parties or governments that elected them. Lawrence Summers

and Joseph Stiglitz, for instance, both served in the Clinton administration in the United

States, the first just after and the second just before his term as Chief Economist of the

World Bank. The fact that they took diametrically opposed views on pension

privatization suggests that the policy ideas of these policy entrepreneurs are not tightly

connected to those of particular governments, but reflect their own professional opinions,

at least in some important instances. Experts opinions are not dictated entirely by their

career profession or academic background either, as both these diametrically opposed

economists were trained and employed at both Harvard and MIT.

Adaptability and Impact

As we argue in this article, the policy prescriptions of international organizations change

regularly in response to a number of factors, including expert ideas. As evidenced above,

the position of the World Bank and EU on pension privatization has been anything but

stable. The World Bank has swung from having no real position on pension privatization,

to launching a major advocacy campaign, to backing away and endorsing other

approaches, in more recent years. The EU similarly has been riven by disputes that it has

sought to resolve in a decade-long process culminating in a recent white paper on pension

reform across Europe.

One may wonder: if international organization ideas about policy are so

contentious and unstable, why would anyone accept their advice? Yet, the idea that

policy advice should be stable is nave. As the world changes, countries typically demand

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the most up-to-the-minute policy advice, even if it differs from what was on offer in

previous years. The expert legitimacy of international organizations demands flexibility

and adaptability to changing demands and not to be bound primarily by ideology or past

practice. Indeed, up-to-the-minute, flexible expertise may be part of why demand for

international organization advice is in such great demand.

The impact of international organizations depends upon their delegated, expert,

and other sources of legitimacy. In order to maintain this credibility, they cannot afford to

be far out of step with dominant expert paradigms or ideas in international politics. They

must change with the times, in contrast to ideological think tanks, which ideologically-

driven individuals and political organizations of various stripes rely on to provide

intellectual support at times when they have access to government. Access to, and control

of, international organizations is a valuable prize. Policy entrepreneurs and their networks

compete to define the policy ideas and agendas of international organizations. This

suggests that the key to influencing international organization ideas and behavior is to

develop and control policy networks with expertise and credentials relevant to particular

organizations and situations.

Conclusion

Wade (1996), in a brilliant account of paradigm maintenance, argued that the East Asian

Miracle report of the World Bank showed that the World Bank was in thrall to a liberal

economic ideology at the service of the United States. Yet there is a different

interpretation of his story. A truly rigid, ideological organization would never have

agreed to write the East Asian Miracle report in the first place. That the World Bank was

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forced by Japan, one of its shareholders, to study the Japanese model of economic

development at a time when its leaders were committed to a different policy path shows

openness to new policy ideas as a matter of principle and organization. The East Asian

Miracle story is one of contestation, not unchallenged hegemony. Different camps and

policy entrepreneurs within the World Bank debated whether state planning or market

signals contributed to rapid development in Asia and found some sense in both

perspectives. It is true that liberal perspectives were inserted and even dominated, for a

number of years. It is true that the report had no real impact on the World Banks work in

subsequent years, in which it sought to impose liberal policies on Asia. However, times,

as well as ideas, change. Today, the Chief Economist of the World Bank is a Chinese

economist, Justin Yifu Lin, who supports the state side of the East Asian Miracle story.

At the time, the Japanese were isolated. This is no longer the case.

International organizations are open systems that may be dominated for relatively

short periods of time by certain paradigms and other ideational influences that arise from

powerful governments, professions, or policy communities. However, they also display a

remarkable fluidity over time, especially when compared to ideologically-driven

advocacy tanks that operate in countries like the United States. International

organizations are truly sites of contestation. They may be influenced from a variety of

different sources, but in the pension area, they appear to be particularly swayed by

dedicated and well-placed policy entrepreneurs, who help promote ideas they believe best

address the problems of the day. Thanks to their reliance on expert legitimacy, expert

discourse and ideas can have a fundamental impact on the behavior of these

organizations. In contrast to advocacy think tanks, which identify with relatively stable

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ideological creeds and policy paradigms, international organizations can and do change.

In this article, we have suggested a comparative context, in which international

organizations are relatively open compared to ideologically-based think tanks. We have

developed several propositions about international organization behaviors, such as seeing

international organizations as open systems (Bertalanffy 1968), sites of contestation

(OBrien, 2002), and deriving their legitimacy from expert discourse (Barnett and

Finnemore, 2004). This makes international organizations open to a variety of ideas and

perspectives on policy, and rarely committed to one perspective forever. We have shown

that it is dangerous to stereotype international organizations viewpoints on policy, except

during relatively short periods when key policy entrepreneurs and their network succeed

in asserting their dominance.

It should be recognized that this contested and continually changing perspective

on best practice within international organizations makes them difficult to study. One

cannot assume much about their intent without doing a detailed analysis of the thinking

and expert debates taking place within the organization (Kogut and MacPherson 2011).

Nonetheless, the experience of pension privatization suggests that, despite these inherent

difficulties, it is vital to policy analysis to improve our understanding of changing ideas

and discourse within international organizations, as these relatively flexible, expert

organizations can have such a major impact on policy decisions made by governments

throughout the world.

Much more research in global social policy needs to be conducted on the

determinants of ideational change in international organizations and other transnational

actors. For instance, in future research, scholars could take a truly systematic look at the

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mechanisms according to which, at certain points in time, why some ideas, and the

experts articulating them, become more legitimate or dominant within particular

international organizations. Another important issue to address in future research is the

conditions under which international organizations are likely to change their dominant

policy ideas and paradigms. Future research also may identify the factors that empower

or reduce the influence of experts and their ideas within particular organizations. This

type of analysis could test the applicability and identify the potential limitations of our

ideational model. In short, there is plenty of work ahead for scholars who recognize the

role of ideas in international organizations and in global social policy and seek to develop

a systematic understanding of their impact.

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Figure 1: Pension Privatization by Year

Endnotes

1 The literature on international organizations is very extensive. For example: Abdelal

2007; Bs and McNeil D, 2004; Checkel, 2005; Dion 2008; Epstein, 2008; Keck and

Sikkink, 1998; Pop-Eleches 2009; Simmons Dobbin and Garrett, 2008; Tarrow, 2005;

Vachudova, 2005; Woods, 2006; Yates, 2001. This article only engages with the most

relevant publications dealing with the core theoretical and empirical issues we raise.

2For example: Bland and Cox, 2011; Campbell 2004; Hall, 1993; Goldstein and

Keohane, 1993; Hansen and King 2001; Lieberman, 2002; Moreno and Palier, 2005;

Padamsee, 2009; Parsons, 2007; Skogstad, 2011; Somers and Block, 2005; Stone, 2004;

Surel, 2000; True and Mintrom 2001; Wendt, 1999; Yee, 1996.

3The concept of veto players refers to institutional actors whose support is needed for

the adoption of concrete policy reforms: Tsebelis 2002.

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4For a critique of the concept of policy paradigm see Carstensen, 2011.

5On the long-term intellectual roots of the multi-pillar model formulated in that 1994

report see Leimgruber, forthcoming.6On the debate about pension privatization in Africa see Kpessa and Bland, 2012.

7 In 2011, two countries privatized their pension systems, Czech Republic and Malawi

(Orenstein, forthcoming). Actually, Malawis decision to mandate individual pension

savings accounts above a certain income threshold was not strictly a privatization, since it

had no prior national pension system. Participation in the Czech Republics system is

voluntary. It is difficult to know if this signifies the restart of a pension privatization

trend or two anomalous cases. However, if pension privatization does restart, it will most

likely take a different form, reflecting the evolution of expert debate since 2005

(Orenstein 2011).